1. Margin trading is a hedging tool, which we can use to reduce risks;

2. Financing is equivalent to buying stocks with leverage, and short selling is equivalent to shorting stocks;

3. Ordinary investors do not recommend the use of margin financing and securities lending, which is risky and difficult to grasp.

With the continuous development and reform of China's stock market, many hedging tools appear in China's stock market. Stock index futures and margin financing and securities lending are two hedging tools that we often use. Through their hedging, our risk can be minimized, which is the advantage of using hedging tools.

The hedging risk of stock index futures is greater and the operation is more difficult. Ordinary investors will choose margin financing and securities lending as a hedging tool, which is relatively simple and the risk is easier to control.

First, margin financing and securities lending is a hedging tool, which can help us reduce risks.

The most important function of margin trading is that it can be used as a hedging tool to help us reduce the risk of intraday trading.

If we find the risk after buying the stock, we can control the risk by shorting the stock. Or we want to lock in profits after the stock we buy rises, or we can lock in profits by short selling securities to minimize the risk.

Second, margin trading is a double-edged sword.

Financing is equivalent to using leverage to buy stocks, which invisibly increases risks; Securities lending is equivalent to shorting stocks. If you are not optimistic about the future trend of stocks, you can short stocks through securities lending. It should be noted here that short selling through short selling through securities lending does not always have a source of securities. Only when there is a source of securities can you short stocks.

Third, ordinary investors do not recommend using margin financing and securities lending.

Just now, someone said that margin trading is a double-edged sword. If we do it well, we can increase our income quickly. If you don't grasp it well, it will lead to faster loss.

Ordinary investors do not recommend the use of margin financing and securities lending. The main reason for tolerance is that they should be long and short, and it is impossible for ordinary people to have a rapid change of thinking. Moreover, financing increases leverage, which is more volatile and risky, which is too high for investors.